What's next for REDD+?

On a cold day in Warsaw last year, governments from around the world reached an agreement with far reaching implications for the world's forests, especially those in the tropics and subtropics. After several years of negotiations they agreed a framework — called REDD+ — to compensate developing nations for avoiding deforestation. So what's next? This month, IIED hosted a two-day conference to answer that question.

29 April 2014
Deforestation in Kalimantan, Indonesia, which has been pledged US$1 billion pledge of REDD+ finance from Norway (Photo: Josh Estey/Aus Aid, via Creative Commons http://creativecommons.org/licenses/by/2.0/)

Deforestation in Kalimantan, Indonesia, which has been pledged US$1 billion pledge of REDD+ finance from Norway (Josh Estey for AusAID, CC BY 2.0)

Drivers, landscapes and other sectors

Most people think REDD+ is about forests. That's just wrong. Forestry-related drivers of deforestation and forest degradation are just part of the picture. Many speakers at the IIED meeting on 9-10 April spoke of the need to address the drivers of deforestation in the broader context of local development, which means tackling both the forest sector management challenges as well as addressing the need to produce more from less.

Ways to do this include reclaiming already cleared land, improve efficiency in production and consumption of biomass energy, and integrated land use planning for more sustainable mining and infrastructure development. The solution for the current emissions from land use and land use change will not come from the forest sector alone.

Underlying the drivers are economic goals such as meeting growth ambitions, creating jobs, reducing poverty and generating tax revenues. Related to this, REDD+ must be implemented at a landscape level which embodies various resources, various and competing uses and users.

The tendency in REDD+ implementation however has been to "work with communities" – but in landscapes covering as much as 500,000 hectare and more, this means leaving out many other players, such as small and medium-sized enterprises, or even the large scale investors in key commodities and the energy and mining sectors. This can reduce the efficiency and effectiveness of tackling deforestation and creates the risk of reducing deforestation in one place but increasing it elsewhere.

We need solutions that address the whole value chain. In the case of small-scale biomass energy, that could mean improving the efficiency of energy conversion from wood to charcoal for example – with better kilns — and working with consumers to promote use of improved stoves.

Filling the finance gaps

Delegates at the IIED meeting noted that there is both a lack of long-term investment in tackling deforestation and not enough of a premium for sustainable forestry. Readiness phases take longer, and the costs of developing the readiness plans; strategies and testing are much higher than expected.

Compensation for land use change and delivery of emissions reduction is important, but as is being shown in Indonesia, we cannot leave the land users' expectations unmet again. While it would be desirable to compensate them for the opportunity cost of not producing palm oil and other lucrative commodities from deforested or degraded forest lands, in my view it is also important to account for the incremental benefits of improving land use and production systems.

So we need to think about premiums in new ways, such as incentives to famers that will increase their yields and benefit from sales of surplus produce or even meet their food demands. Combining these benefits with some finance (a premium) for the carbon from avoided deforestations is more practical than carbon alone and could work for small or large scale agriculture.

Missing markets

Something else that's missing is a steady demand for the carbon credits these countries could provide. Delegates suggested that the UN climate change talks needs to move faster to reach agreement on a compliance mechanism for mitigating climate change. But REDD+ is just part of the talks and negotiators there are overloaded.

A quick fix suggested by the Global Canopy Programme would be for the big players (donors and markets that can drive demand) to reach a separate agreement to finance the purchase of carbon credits.

More than 50 countries are getting ready to implement REDD+ (with support from UN-REDD and FCPF as well as bilateral agreements). They are at differing stages of developing plans, strategies and testing. Some are ready to implement emission-reducing activities soon, and ready to do performance based payments. Soon a large number will be ready to get a fair price for reduced land use emissions.

Technology and capacity must come first

For some countries, though, money is not the problem. Indonesia, for instance, has a US$1 billion pledge of REDD+ finance from Norway, but cannot access it yet. It needs to show that it can do the monitoring and reporting needed to demonstrate a decline in emissions from deforestation. But after five years of preparing to implement REDD+ there is still no sign of the money. The NRDC says some people there feel that they have been misled once more and don't want to hear any more about REDD+.

The irony is that the technology and capacity to establish reference levels does exist – but just not at the required scale in the countries that need it. This should be easy to fix.

Managing risks

Under the agreement countries made in Warsaw, safeguards must be in place to prevent environmental or social harm arising from REDD+ projects. What's missing is a good understanding of the relationship between risk assessment and safeguards. Very few countries that hope to benefit from REDD+ have done a Strategic Environmental and Social Assessment to identify likely impacts of REDD+. Other countries such as the Democratic Republic of Congo and Nepal have started a SESA before completing their REDD+ strategy.

The challenge is for countries to translate international guidelines in to real rules at the national level. The great diversity of issues raised on the social side alone suggests that major issues remain unresolved in wider natural resource management and investment. While REDD+ provides an opportunity to put these issues in one place and try to resolve them, many people say REDD+ might not be panacea for all prevalent inequity issues.

Future prospects

REDD is not just about climate but can be good for broader economic strategies and making investments across diverse sectors more sustainable. Importantly, there is growing private sector engagement with REDD+, from companies like Althelia Ecosphere, which are going beyond talking about investments to offset carbon emissions to talking about "carbon insetting". This means creating ways for companies to reduce emissions throughout value chains. The company emphasises that social and environmental benefits are core products of its business model and not just sub-products that need mainstreaming.  

Overall, I'm still optimistic. If REDD+ fails to go forward, the damage will be much greater than if we never started this conversation.

Isilda Nhantumbo is a senior researcher in IIED's Natural Resources Group (Isilda.nhantumbo@iied.org)

Read more about the REDD+ event at IIED or view the presentations people made there.

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